Mr Adebayo Adelabu, Minister of Power, said that the introduction of band A with a higher tariff has reduced electricity subsidy to N1 trillion from about N3 trillion.
The minister said this at the public hearing on electricity tariffs in Abuja on Tuesday.
The hearing was organised by the House of Representatives Joint Committee on Power, Commerce, National Planning, and Delegated Legislation.
Adelabu said that without an increase in electricity tariffs the expected subsidy would have been close to N3 trillion.
He said the Federal Government could not afford to pay N3 trillion in subsidies
The minister said that instead of piling up debt for the government, the ministry came up with the model for customers to pay for subsidies on band A.
According to him, this will compensate for the fuel and diesel that consumers are using.
He said that what consumers spend now is cheaper compared to fuel and diesel, even with the increase in electricity tariff.
“We are still about the cheapest, even in sub-Saharan, in spite of the tariff. Our neighboring countries pay higher. So the price isn’t comparable.
“Band A is cheaper compared to other sources of generating power. It is almost 50 per cent cheaper to connect to band A of the national grid than to run on fuel and diesel.
“So when we complain about the higher tariff, it is cheaper for any business to pay for a grid connection than to individually generate power,”he said.
He said President Bola Tinubu`s administration meant well for Nigerians, adding that he would not aggravate an already bad situation in the country.
“We are out to make things better for Nigeria and to create industrial development through our local manufacturing, and energy is needed to do this,” he said.
